Big changes are coming in the world of property transactions in Pakistan! Starting from July 1, 2023, there will be an increase in withholding taxes on buying and selling immovable properties.
But that’s not all. Brace yourselves for another impact on property transactions, as the Federal Board of Revenue (FBR) plans to raise property valuation rates from August 1, 2023.
The FBR will work closely with provincial authorities to complete this exercise by the end of the month. The revised rates, which will be announced by the FBR, will not only affect the existing 42 cities but will also include nine additional cities, increasing the total to 51.
Presently, the FBR’s property valuation rates are applicable in more than 40 cities across the country. So, get ready for an upward revision of property valuations ranging from 13 to 15 percent in these cities.
It’s important to note that these changes are part of amendments made under the Finance Act 2023. As for the withholding tax rates, which apply under sections 236C and 236K of the Income Tax Ordinance 2001, they have also been revised.
For income tax return filers, the rate of withholding tax has been increased from 2 percent to 3 percent under section 236C, while for non-filers, it has gone up from 4 percent to 6 percent.
Similarly, under section 236K, the withholding tax rate for filers has increased from 2 percent to 3 percent, and for non-filers, it has been raised from 7 percent to 10.5 percent.
These changes aim to collect advance income tax more effectively. Both filers and non-filers need to be aware of the revised rates to avoid any surprises during property transactions.
Keep an eye out for the official notifications and make sure to consult with experts for a smooth and compliant property buying or selling experience.